Real-world real estate: Real success

4/1/2014

After 15 years in the real estate market, Ross Cowan (MBA ’99) knows that the key to success is staying curious.

“Have a curious mind,” said Cowan, managing director of real estate investment firm Northwood Investors. “If you enjoy doing something, it means you’ll work hard at it. If you work hard, most likely you’ll be successful.”

After the 2008 recession left the real estate market reeling, Cowan said he is seeing many reasons to be positive today. The housing market grew 32 percent from 2013 to 2014, he said, while rates are low and asset valuations are recovering.

“Absent some shock to the system, we think we’re in a very healthy recovery,” he said.

Kent Griffin, president and COO at BioMed Realty, said this is the strongest environment he’s seen for his niche within the real estate market. BioMed, a publicly-traded REIT with $6 billion in assets, provides office and research space to biotechnology companies, universities and research organizations.

BioMed is facing new challenges as interest rates for REITs rise and more available capital increases competition for acquisitions, Griffin said. “REITs had the advantage because there was such limited capital. They could have the strong position competitively,” he said. “How do we now demonstrate to investors the ability to create growth and compact rising interest rates?”

Brent Morris, director of private equity firm True North Management Group, focuses on buying and capitalizing on debt in the market. From 1999 to 2007, debt capital in the market tripled, Morris said. His firm is focusing now on investments in suburban areas and cities like St. Louis and Indianapolis, where lots of debt still exists today.

“The markets do feel like there’s general improvement,” he said. “From where I sit it seems like a tale of two markets: suburban markets haven’t recovered yet, while bigger cities and markets have.”

On the urban development side, Jeff Lowenberg, vice president of development at GID Development Group, said his company is seeing a lot of demand in cities. Driving this urban development are baby boomers and Generation Y, as well as cultural changes — such as the rise of local boutique businesses and a lack of interest in commuting to work from suburbs.

“It’s a really exciting time to be an urban developer,” he said. “There are a lot of different demand drivers coming together.”

In closing, panelists offered advice to the audience of Undergraduate Business and MBA students and business professionals:

Capitalize on the congenial dynamic among UNC alumni and follow your passions. “When you have that underlying passion, it really will propel you,” said Stephen Van Dusen, managing director at Eastdil Secured.

“Spring from this network,” Morris said. “There’s a natural desire to work with UNC and Kenan-Flagler people. Don’t be afraid to use that network...Don’t live far from Bojangles.”

Reach out beyond the walls of UNC Kenan-Flagler, Lowenburg urged. Working with legal experts within the UNC School of Law, local architects, engineers and real estate projects could help prepare students for careers in real estate. “They’re not always the sexiest part of business school, but if you’re interested in development, those are key to honing your skills.”

“Stay curious, and try to apply that post-school. Luck is important, but I think a large factor is working hard and being curious,” said Griffin.